January 11, 2010
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New Year; New Decade; New Lease on Life, Pt.3
Variables contributing to your FICO score.Review your three credit reports carefully. Don't be surprised by differences between them. One may have an open credit card or other loan account listed that one or two of the others may not. Some financial institutions only report to one or two bureaus but most report to all three. Check the debt balance, monthly payment, and terms of all accounts looking for any discrepancies. With credit card theft reported as being the nation's fastest growing criminal activity and the amount of debt making up 30 percent of your FICO score, you'll want to make sure all account balances are accurate. Also review your report for any accounts including credit cards, loans, and mortgages that may not belong to you. Identity thieves operate by obtaining personal information on an individual and then using the information to open up new accounts. If you're not sure an account is yours, dispute it. All three credit bureaus provide online dispute service.
Your payment history is another major contribution to your FICO score; it makes up approximately 35 percent. If the report shows a late payment history on any credit card or other loan account which you believe to be false, dispute it. Credit bureaus use the available credit on your credit card accounts to calculate your debt ratio. Debt ratio is also used to calculate your FICO score and to determine your risk factor, therefore, it's important to verify the accuracy of your available credit; dispute any discrepancies.
Once you have completely reviewed all your credit card accounts, auto loans, mortgages, and other debt it's time to take a look at the negative elements on your report. Negative elements include bankruptcies, judgments, loan defaults, and collection agencies. Any items that have been previously paid in full and yet continue to linger on the report should be resolved. You should also dispute any item over seven years old.